Delta wins right to end Freedom Airlines agreement

The United States District Court for the Northern District of Georgia has ruled against Mesa Air Group subsidiary Freedom Airlines in its litigation with Delta Air Lines regarding Delta’s efforts to terminate an agreement covering 22 regional jets.

The litigation stemmed from Delta’s asserted termination of the Freedom Airlines agreement based upon flights cancelled at Delta’s request, during periods of operational irregularity (bad weather and ATC delays) at New York JFK in order to make way for Delta’s larger jets, which were then retroactively held against Freedom for purposes of calculating its minimum flight completion factor. Based upon this retroactive calculation, the Court had issued a preliminary injunction in June 2008 prohibiting Delta from terminating the agreement.

In this latest decision, the Court has reversed its prior preliminary injunction preventing Delta from terminating the agreement. Mesa Air Group is in the process of reviewing the Order and evaluating options going forward. The company has not yet reviewed its options for appeal.

"We are extremely disappointed by the District Court’s decision. We have at all times sought to act as a good partner and work with Delta as a member of Delta Connection,” commented Jonathan Ornstein, chairman and chief executive of Mesa Air Group.” Unfortunately Freedom’s willingness to proactively cancel flights in JFK at Delta’s request for the benefit of Delta was held against Freedom and was used as the sole basis to terminate our contract. It is disheartening that our company and people will be punished retroactively for taking actions in good faith at Delta’s direction,

"We are greatly concerned for our approximately 500 employees who will be significantly impacted as a result of this decision, despite their hard work and commitment which has placed Freedom’s operation at or near the top of the Delta Connection portfolio over the last year,” Ornsteing continued. “The loss of these jobs, particularly under these circumstances is extremely disappointing. I would like to thank all of the employees at Freedom for the outstanding job they have done over the last two years under extremely difficult circumstances."

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